The Hidden Cost of Big Box Stores
As with anything, striking a balance is critical for ultimate success, the same can be said in building a community. Sir Issac Newton once said that "We build too many walls and not enough bridges." Picture two communities, identical in size, each wrestling with the same challenge: how to grow their economies in difficult times. One leader sees a big box store proposal and believes salvation has arrived. The other examines the numbers differently. What that second leader discovers changes everything.
Most communities chase the same dream: attract the big retailers, the recognizable chains, the massive distribution or data centers. Tax revenue projections look promising. Ribbon-cutting ceremonies make for good photos. But beneath the surface, a very different story unfolds.
Researchers at Tischler & Associates decided to look beyond glossy projections and examine what these developments actually cost communities. What they found should be required reading for every city council member in America. For every 1,000 square feet of big box retail, taxpayers shell out $468 annually once you account for roads, infrastructure, and services these stores demand. That strip of locally-owned specialty shops downtown? They generate a net return of $326 per 1,000 square feet. Fast-food outlets cost taxpayers a staggering $5,168 per 1,000 square feet each year.
The development that looks like economic progress is oftentimes draining community resources.
But the story doesn't end there. Dr. Patricia Frishkoff at Oregon State University analyzed charitable giving patterns across companies of various sizes for the Small Business Administration. The results were striking, employees at small and midsized companies with fewer than 100 workers generated an average of $789 in cash and in-kind donations throughout their communities. Their counterparts at larger businesses with more than 500 employees? Just $334 per employee—nearly 60% less.
When a local business owner sponsors the Little League team, donates to the food bank, and buys a table at the fundraiser, that's not just generosity—it's a fundamentally different relationship with the community. Perhaps most revealing is research by Stephan Goetz and David Fleming at Pennsylvania State University. They analyzed 2,953 counties across America, representing every type of community imaginable. After controlling for countless variables, they discovered something remarkable: counties with more small and mid-sized locally-owned businesses enjoyed greater per capita income growth. Areas dominated by large, absentee-owned businesses showed lower incomes overall.
The explanation is straightforward. Most big box retailers and chains offer wages clustered at the lower end of the spectrum. Locally-owned businesses create opportunities across the income range, including management roles that actually pay middle-class wages. The implications reach beyond economics into public health. When researchers studied 3,060 counties and parishes for the Cambridge Journal of Regions, Economy and Society, they found that areas with a higher proportion of small and mid-sized businesses had lower rates of mortality, obesity, and diabetes.
Remember those two adjacent communities? They're not hypothetical. Researcher Walter Goldschmidt documented their stories in "As You Sow: Three Studies in the Social Consequences of Agribusiness." Both were small agricultural towns in California. One was dominated by large agribusiness corporations. The other consisted primarily of small and mid-sized owner-operated farms. The difference was visible in every aspect of community life—the latter enjoyed a more vibrant, diverse economy and demonstrably higher quality of life.
These aren't just statistics. They represent real choices communities make every day. When economic development dollars flow primarily toward recruiting big chains, that's a choice. When half those resources instead support locally-owned businesses, that's a different choice—with profoundly different outcomes.
The urgency is only increasing. Every month, more dollars flow out of local communities through online retailers, eroding the tax base that supports schools, roads, and emergency services. Communities need a thriving base of local businesses not just to survive, but to build the kind of future that benefits the next generation.
This is where community leaders and local media companies share a common interest. Both need a solid local business base to thrive. Both have a role in educating residents about why choosing local matters. And both have an opportunity to build something that lasts—not just for this quarter, but for decades to come. The question isn't whether your community will grow. The question is what kind of growth you'll choose—and who will benefit from it.
John A. Newby, author of the "Building Main Street, Not Wall Street" column, assists communities and their local media companies combine synergies allowing them to not just survive, but thrive in a world where truly-local is lost to Amazon, Wall Street chains and others. His email: john@360MediaAlliance.net.